MANILA —The Philippine economy grew 5.6 percent year-on-year in 2023, slower than the 7.6 percent expansion in 2022, the Philippine Statistics Authority (PSA) reported Monday.
This means the Marcos administration failed to hit its growth target of 6 to 7 percent for last year.
“While this growth is below our target, it keeps us in the position as one of the best performing economies in the region,” Socioeconomic Planning Secretary Arsenio Balisacan said in a statement.
In the fourth quarter of 2023, the economy grew at an annual rate of 5.6 percent, easing from the revised 6 percent expansion in the third quarter.
READ: PH to grow faster but below gov’t target as headwinds persist
The inter-agency Development Budget Coordination Committee (DBCC) has trimmed its gross domestic product (GDP) growth target for 2024 to 6.5 to 7.5 percent, from the previous projection of 6.5 to 8 percent expansion.
At present, the biggest worry for the government is the prolonged El Niño dry spell, which is predicted to last until the second quarter of 2024 and may push up food and power costs.
READ: Inflation uptick seen with strong El Niño, says BSP official
Another challenge for the economy is the high interest rate environment that can hurt consumption and investments.
Despite inflation easing back to within the government’s 2 to 4 percent target range in December last year, the Bangko Sentral ng Pilipinas (BSP) says it deems it necessary to “keep monetary policy settings sufficiently tight until a sustained downtrend in inflation becomes evident.”